UPDATE 3-AB InBev sees higher Brazil sales, U.S. margin recovery

* Q4 core profit up 9.9 pct at $4.39 bln; forecast $4.4 bln

* 2012 dividend up nearly 30 pct at 1.7 euros

* Sees moderation in costs helping U.S. margins

* Shares up 1.1 percent

By Philip Blenkinsop

BRUSSELS, Feb 27 Anheuser-Busch InBev,
the world's biggest brewer, forecast a pick up in sales in
Brazil and easing cost pressures in the United States would help
it bounce back from a slow start to the year in its two largest
markets.

The maker of Budweiser and Stella Artois makes about 80
percent of revenue in the Americas, shielding it from
recession-hit Europe but still giving it a mix of trading
conditions with fast-growing emerging markets and a more mature
U.S. business.

Underscoring its confidence, AB InBev raised its 2012
dividend by a larger-than-expected 50 cents to 1.7 euros ($2.22)
a share, despite plans to pay $20.1 billion for the 50 percent
of Mexico's Grupo Modelo it does not already own.

Analysts had expected a dividend of 1.48 euros, according to
the Thomson Reuters Starmine SmartEstimate, which weights
analysts according to their past record.

The company met forecasts with fourth-quarter earnings
before interest, tax, depreciation and amortisation (EBITDA) of
$4.39 billion, up 9.9 percent on a like-for-like basis.

"The positives were the dividend was higher and Brazil was
good on both top and bottom line," said Dirk van Vlaanderen,
analyst at Jefferies, with a 'buy' rating on the stock.

"In the U.S. they showed revenue growth. I'm confident they
will be able to grow margins again. I think the outlook is
realistic. It's a tough comparison with strong (product)
launches last year."

At 1250 GMT, AB InBev shares were up 1.1 percent, against a
flat STOXX Europe 600 food and beverage index.

Brewers across the world are increasingly relying on
emerging markets for growth. Dutch group Heineken this
month beat expectations for 2012 and said Africa, Asia and the
Americas should drive continued volume and revenue growth this
year, offsetting a weak Europe.

Denmark's Carlsberg. though, fell short of market
expectations, hit by sluggish western European markets and
stalled growth in Russia.

A SLOW START

AB InBev said sales in the United States, where it has over
half of the market, would be hit by the impact of tax and petrol
price rises on consumer spending, as well as a harsher winter
than in 2012.

But Chief Executive Carlos Brito was relaxed.

"Gas prices are up and down all the time," he said. "The
payroll taxes, history shows the consumers are impacted the
first time, then they get used to it, they adjust."

AB InBev also said it expected U.S. profit margins to rise
this year, following a contraction in 2012, thanks to easing
pressures from costs and investments.

It forecast costs per hectolitre to rise by a
mid-single-digit percentage, against a 7.2 percent increase in
2012.

Distribution costs would also increase by a mid-single-digit
percentage, less than the 8.9 percent last year caused partly by
higher fuel prices and because of the rollout of Bud Light
Lime-a-Rita, which was made in only one U.S. plant and so had to
be transported further.

That should be three plants by the end of 2013.

In Brazil, where its market share is about two thirds, AB
InBev forecast volumes would rise by a low to mid-single-digit
percentage.

It said volumes would be soft at the start of the year
because of wet weather and an early Carnival period.

Last year, margins in Brazil improved thanks to a
combination of higher volumes and prices.

The company's most disappointing region in the fourth
quarter was China, where severe cold and a wet winter drove down
volumes by 8.1 percent, albeit not as bad as the industry
average of 12 percent.

AB InBev said little about its planned purchase of the rest
of Modelo, which U.S. antitrust regulators had sought to block
in the belief that it would raise U.S. beer prices.

After a revision to the U.S. part of the deal, AB InBev and
the U.S. Department of Justice have resumed talks with a stay on
litigation until March 19.

By taking over Modelo, which is Mexico's top brewer and owns
the successful Corona brand, AB InBev would have leading
positions in three of the four beer markets producing the
highest profits.

Brito also dismissed a class action lawsuit filed last week
by U.S. consumers who argue AB InBev has watered down its beers
to boost profits.

"We never play with those kind of things. Quality for us is
of the utmost importance."

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